Measures against the Laundering of Money in the Insurance Business

As a member of the EU, Bulgaria has introduced all the significant norms of the EU law in its internal legislation. The Anti-Money Laundering Act stipulates a number of obligations affecting a considerable number of addressees, a big part of which are legal entities. The circle of these legal entities includes all insurers and registered insurance agents.
Each of these legal persons is obligated, under threat of a considerable financial sanction (up to BGN 50 000 for every violation), to take every suspicious case to the State Agency for National Security (SANS). To facilitate the thus obligated persons, the competent institution (SANS) has issued a list of criteria for determining which actions and persons should be considered suspicious. Below is presented the list of criteria for the insurance business.
1. When more than one insurance is made on the same day for insurance amounts close to the threshold of identification, by several persons who the employee knows are related to one another.
2. A request for insurance of property whose origin is unknown or does not correspond to the financial situation of the client.
3. Orders on part of clients for the transfer of insurance indemnities to bank accounts abroad, without meeting the requirements for such transfers, and also in case of orders for transfers to bank accounts at offshore centers or countries known as havens of bank secrecy.
4. Signing of insurance contracts and terminating them within the one-month gratis period (contract terminated at a loss).
5. Payment of insurance premiums by third parties – not party to the insurance contract, with no probable reason and no close connection to the client.
6. Concluding insurances for the risk “financial losses” and the insured realizes a loss related to a payment abroad and the default on the part of the counterparty.
7. Order on the part of a client that the insurance indemnities for damages sustained as a result of the occurrence of the insurance event be paid to third parties, in cases where the insurance contract is not concluded in favor of third parties.
8. Different clients specifying one and the same bank account for the transfer on the part of the insurance company of sums owed under insurance indemnities, with no good reason for that.
9. Missing of deadlines in submitting primary accounting documents relating to payments under business transactions or operations.
10. Failure to submit documents proving representative powers.
11. Receiving information that a client has given false information or has presented documents or copies of documents containing false contents.
12. When the signal of the GPS-device installed in the insured vehicle has stopped functioning and the vehicle cannot be located.
13. When at the address of the company seat or the address for correspondence declared by the client at the signing of the insurance contract no office can be found and the client cannot be reached at the telephone numbers he has specified as contact details.
14. When after payment of the first installment, the client stops paying and cannot be reached by phone at the phone numbers he has provided for contact, nor at the seat or correspondence addresses of the company declared by him at the signing of the contract.
15. Submitting documents with controversial content (e.g. company amendments not registered with the Commercial Register).
16. When the client has tried to pay with counterfeit money.
17. When shortly after the client who has taken out an insurance policy he cancels it and soon afterwards requests to enter into a new insurance for the same property, but with new information on the property.
18. If the client has concluded a life assurance contract for a big insurance amount and the payment of the insurance premiums comes from abroad and especially from off-shore zones.
1. The client does not provide enough information about the transaction or in the contents of the provided information and documents there are obvious contradictions (the quantity and the type of the goods, mismatch in the capacity of the transport vehicles, the announced price considerably exceeds the market price, etc.).
2. The client does not provide the necessary information or the information declared in the documents required by the insurance employee or the insurance agent at the signing of the insurance contract arouses suspicion concerning its authenticity.
3. Representatives or authorized persons of legal or natural persons present identification documents or documents of representational authority whose authenticity arouses doubts.
4. The client refuses to present their identification documents.
5. Missing from the presented personal documents of the client are essential requisites that can identify the client undoubtedly.
6. The client – an executor of a public procurement contract for delivery of goods or equipment, who before executing the order, wholly or in part, has insured the object of the order in favor of the assignor against loss as a result of fire and/or theft, and then declares that the insurance event has occurred and the goods have perished, but cannot present documents proving the actual import and the existence of the insured goods and equipment.
7. The client presents identification documents which seem forged.
8. The client presents foreign identification documents whose authenticity is difficult to check.
9. The signature in the ID does not correspond to the signature the client has laid down in connection with the operation or transaction.
10. The client does not present or tries delaying the submission of certain declarations or certificates of good standing.
11. The client shows an unusual interest in the regulations of the insurance activity and the control of client documents.
12. The client gives contradictory reasons for the insurance which they want to enter into.
13. The personal and the office telephone numbers of the client are disconnected or such do not exist.
14. The client makes all their contacts with the Insurer only through a third party which is authorized with all rights for entering into all types of insurances.
15. The client tries to become closer with the personnel of the company by offering money, gifts or services.
16. The client is quick to declare that their finances are clean and/or the client is unusually well informed about the measures against money laundering and the financing of terrorism.
17. The client is being accompanied or supervised, or the transactions are being carried out in the presence of third parties, which can raise well-founded doubts concerning the exercise of pressure or threats.
18. A client who specifies as his own the address of a third party.
19. The address of correspondence is a mailbox.
20. Clients represented in the country by a branch or subsidiary of a foreign organization known to be involved in the production and /or sale of narcotics, trafficking of people, prostitution and smuggling.
21. Persons allegedly involved in illegal activities according to the mass media or other sources.
22. All persons, groups or organizations included in the list of the Measures Against the Financing of Terrorism Act.
23. The client tries to persuade the officer of the company not to record the necessary data concerning their identity when filling in the documents for the transaction.
24. The client makes a payment in cash, with a significant part of the banknotes being in bad condition.
In all cases, whenever the employee of the insurance company or the insurance agent comes across any of the above suspicious behavior, they are obligated to undertake the necessary steps and measures prescribed by the law.

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